Fabian Gerber, Senior Relationship Manager, Primary Markets, at SIX Swiss Exchange looks at how Sparks could reshape the biotech SME (small- to medium-sized enterprise) sector in the Swiss Biotech Report 2022.

Biotech companies listed on SIX Swiss Exchange raised CHF 200 million in follow-on equity capital transactions during 2021, with activity in the sector remaining buoyant despite the widespread market volatility. In a recent article, Gerber discussed how Sparks, the Swiss Exchange’s newly launched SME trading venue, can support burgeoning biotech companies in more easily accessing equity capital markets.

Traditionally, biotech IPOs in Switzerland take place when a company is very developed, whereas those seeking an earlier listing often have to look elsewhere. Sparks is attempting to bridge this gap, by offering biotech SMEs an earlier route to market and their VC backers a quicker exit.

Aside from providing biotechs with capital raising opportunities domestically and internationally, Sparks enhances companies’ visibility, enables SMEs to diversify or expand their shareholder structure and gives Swiss firms protection under Switzerland’s robust takeover rules. Institutional investors will also be comforted by the fact that SMEs admitted to Sparks must adhere to strict reporting and regulatory requirements – similar to those expected of listed companies on the main exchange. Despite the stringent oversight, Sparks is designed to be incredibly flexible so as to encourage biotech SMEs to list.

Activity on Sparks is gathering momentum. In February 2022, Xlife Sciences, a Swiss company specializing in the development and commercialization of early-stage research projects at universities and other institutions operating in the healthcare sector, became the first company to list on Sparks. The transition to a regulated market in Switzerland subsequently allowed the company to make itself more accessible to institutional investors, increase liquidity and further raise its profile.

Gerber’s article further highlighted the other benefits SMEs can obtain through Sparks. For example, companies can leverage Stage, a program involving Baader Helvea, UBS, Zürcher Kantonalbank and Finanz und Wirtschaft, which helps increase the visibility of SMEs among capital market stakeholders through services such as research coverage and factsheet creation – and Bridge, a platform which offers a consolidated calendar aggregating corporate events across issuers as well as access to issuers.

In addition, the Sparks IPO Academy is an exclusive six-month program designed to help executives of fast-growing SMEs – including biotechs – prepare for a potential IPO on SIX Swiss Exchange’s Sparks segment.

Read the full article here.